Red Letter Days experiences a plunge into administration

Red Letter Days had the high-octane experience of going into administration last night.

The company, which sells gift experiences such as climbing Mount Everest or flying to the edge of outer space, was forced to appoint Kroll as administrator to oversee a quick sale.

It all proved too much for Red Letter Days' founder and chief executive Rachel Elnaugh, the business guru from Dragons' Den, the BBC show on which she gives advice to budding entrepreneurs.

Even while Kroll issued a press release confirming the appointment of Andrew Pepper and Alastair Beveridge of its Corporate Advisory & Restructuring Group as joint administrators, Ms Elnaugh said she did not know the company was in administration.

"I don't know. I cannot comment and I need to terminate this call," said Ms Elnaugh, 40, hanging up.

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Sources close to Kroll said Red Letter Days, which employs 130 staff, had been put into administration at the request of the directors "as a result of cash-flow difficulties, which can only be resolved with further investment".

A number of its suppliers have stopped doing business with the company, claiming they are owed hundreds of thousands of pounds. They include the Everyman and Thruxton motor racing businesses, dolphin watching charity Marine Connections, and tank driving company Tanksalot.

While refusing to admit to administration, Ms Elnaugh, who founded the company in 1989 and owns almost 60pc of the equity, insisted she had agreed a deal to sell the business.

"A deal has been done and an announcement will be made shortly," said the mother-of-four.

She declined to say whether her deal was with fellow Dragons' Den panellist Peter Jones, 38, owner of Phones International, the telecoms firm, who on Sunday said he was "looking at opportunities with Red Letter Days". He did not return calls.

Sources close to Kroll stressed it was the administrators' role to sell the business, not Ms Elnaugh's.

Mr Pepper and Mr Beveridge, who were also Allders' administrators, said they had "already received interest from a number of third parties". The company has about £20m annual sales.

Mr Pepper said the business had an "outstanding brand" and administration was a "protective measure." He added: "We are very keen to sell this business in short order, as any consumer-facing business can quickly lose value if its customers lose confidence in the brand".

Red Letter Days' failure is embarrassing for the BBC, which has just filmed a second series of Dragons' Den.